IANS

US dollar rebounds amid market expectation on Fed rate hikes

New York, Dec 6 (IANS) The US dollar pared losses in late trading on Wednesday, as investors widely expected the US Federal Reserve to raise interest rates in December following sharp losses of the dollar on Tuesday.

In late New York trading on Wednesday, the euro decreased to $1.1340 from $1.1341 in the previous session, and the British pound was up to $1.2736 from $1.2717 in the previous session, Xinhua news agency reported.

The Australian dollar fell to $0.7264 from $0.7337.

The US dollar bought 113.19 Japanese yen, higher than 112.81 Japanese yen of the previous session.

The US dollar rose to 0.9978 Swiss franc from 0.9974 Swiss franc, and it was up to 1.3384 Canadian dollars from 1.3247 Canadian dollars.

Expectation remained high for the US central bank to raise interest rates at its next policy meeting scheduled for December 18-19 to shore up the safe-haven currency.

The world’s most liquid currency bore downward pressure after the yields of two-year and three-year US government bonds surpassed the five-year yield for a second day on Tuesday.

The rarely-seen inversion of the yield curve is normally viewed as a precursor of an economic downturn, sparking broad fears of a slowdown in U.S. economic growth.

The recent broad sell-offs in the stock markets and persistent uncertainty over U.S.-China trade tensions have increased demands for the greenback to avert from riskier assets, paring some of the losses caused by the inverted yield curve.

–IANS
pgh/

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